Obama Urges Compromises on Looming Budget Cuts, But No Deal Imminent

Monday

Feb 25, 2013 at 12:50 PM

WASHINGTON | Facing an end of the week deadline, President Barack Obama said Monday that Congress can avert sweeping across-the-board cuts with "just a little bit of compromise," as he sought to stick lawmakers with the blame if the budget ax falls.

By JULIE PACE & PHILIP ELLIOTTThe Associated Press

WASHINGTON | Facing an end of the week deadline, President Barack Obama said Monday that Congress can avert sweeping across-the-board cuts with "just a little bit of compromise," as he sought to stick lawmakers with the blame if the budget ax falls.

Speaking to the nation's governors, Obama acknowledged that the impact of the $85 billion in cuts may not be felt immediately. But he also said the uncertainty already is impacting the economy, as the Pentagon and other agencies get ready to furlough employees.

"At some point we've got to do some governing," Obama said. "And certainly what we can't do is keep careening from manufactured crisis to manufactured crisis."

Despite Obama's urgent rhetoric, there is little indication that the White House and Congress will reach a deal by Friday's deadline. Obama wants to offset the so-called sequester through a combination of targeted spending cuts and revenue increases, but Republicans oppose any plan that would include tax hikes.

The $85 billion budget-cutting mechanism could affect everything from commercial flights to classrooms to meat inspections. Domestic and defense spending alike would be trimmed, leading to furloughs for hundreds of thousands of government workers and contractors.

Defense Secretary Leon Panetta has said the cuts would harm the readiness of U.S. fighting forces. Transportation Secretary Ray LaHood said travelers could see delayed flights. Education Secretary Arne Duncan said 70,000 fewer children from low-income families would have access to Head Start programs. And furloughed meat inspectors could leave plants idled.

Despite the Friday deadline, there are no serious negotiations happening between the White House and Congress. Obama is focused instead are trying to rally public support for his stance in the debate by warning Americans of the dire consequences of the across-the-board cuts.

The president told the governors that cuts would "''slow our economy, eliminate good jobs, and leave a lot of folks who are already pretty thinly stretched scrambling to figure out what to do."

The spending cuts have frustrated governors attending the National Governors Association meeting in Washington. They contend it has created widespread uncertainty in the economy and hampered economic recovery in their states.

"The No. 1 risk, in my view, to the continuing economic comeback of Michigan is the federal government," Michigan Gov. Rick Snyder, a Republican and former business executive, said in an interview. Snyder said many companies remain in limbo on whether to invest in their business because of the financial uncertainty.

"What's the likely outcome? Are they going to put in a solution that's set for two or three years or are they simply going to say now it's going to move to the fall? It's not good," he said.

The White House, seeking to ratchet up pressure on congressional lawmakers, gave the governors state-by-state reports on the impact of the cuts on their constituencies.

White House officials pointed to Ohio — home of House Speaker John Boehner — as one state that would be hit hard: $25.1 million in education spending and another $22 million for students with disabilities. Some 2,500 children from low-income families would also be removed from Head Start programs.

Officials said their analysis showed Kentucky would lose $93,000 in federal funding for a domestic abuse program, meaning 400 fewer victims being served in Senate Minority Leader Mitch McConnell's home state. Georgia, meanwhile, would face a $286,000 budget cut to its children's health programs, meaning almost 4,200 fewer children would receive vaccinations against measles and whooping cough.

The White House compiled its state-by-state reports from federal agencies and its own budget office. The numbers reflect the impact of the cuts this year. Unless Congress acts by Friday, $85 billion in cuts are set to take effect from March to September.

As to whether states could move money around to cover shortfalls, the White House said that depends on state budget structures and the specific programs. The White House did not have a list of which states or programs might have flexibility.

Republican leaders were not impressed by the state-by-state reports.

"The White House needs to spend less time explaining to the press how bad the sequester will be and more time actually working to stop it," said Michael Steel, a spokesman for Boehner.